Business Tax & Basis periods

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi<BR>Am struggling with the concept of basis periods. Don't seem to be able to get to grips with the idea.<BR>Anyone any ideas, help please.<BR>thanks<BR>Sec0

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Business Tax & Basis periods

    <BR><BR>As I understand it, there is the fiscal year (5th April to 6th April) and then each company/trader has their own Accounting Period. Each of these must always be twelve months, unless it's the start or end of a business.<BR><BR>You need to read the question to decide if the first computation includes a stated profit for a short year <12 months, a twelve month year or a long year >12 mons(it might say that after 22 months of trading, X has £33K profit, this is a clue how to go about calculating it)<BR><BR>Cessation of trade, you add up the overlap at the commencement and deduct from last profits<BR><BR>I haven't really mastered it myself, have to spend ages thinking about it and it never looks right.<BR><BR>A lot more challenging than personal tax, which makes it all the more interesting IMV. <BR><BR>

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